A Pvt Ltd Company is in business - Developer/ Builder.
However the Co is also a partner in a partnership firm . The Share of Profit is Rs. 8 cr. during the year
Now Question 1. Should this share of Profit of Rs. 8 Cr be considered for tax audit. Will this company be liable to tax audit under sec 44 AD.??
Question 2. Will this share of Profit of Rs. 8 Cr be taxable under Book Profit in MAT.?? (The company has already paid tax in partnership firm on Rs. 8 cr profit).
Other Information :. Since the project undergoing is under construction. The T/O is Nil. Other Income : Share of Profit from Partnership firm - Rs. 8 Cr.
Expenses in P& L A/c : Rs. 11 lacs Net Profit : Rs. Rs. 7.90 cr approx
The Expenses of project undergoing are of Rs.3.28 cr - trsfd to COP (including purchases of Rs.78.94 lacs)
SIR KINDLY ANSWER THE ABOVE QUESTION WITH A VALID SOURCE / LINK.
30 September 2013
Answer 1. The profit from partnership is exempted from tax under section 10(2A). The same shall not be included in turnover for application of 44AB.
Whether the company is liable for tax audit udner 44AB shall depend on its business turnover.
Answer 2. MAT is not applicable on profit from partnership.